Long-term challenges abound, starting with the most technological sectors, but for now the Russian economy is showing resilience in the face of Western sanctions, thanks in large part to oil and gas exports.
According to revised IMF forecasts on Tuesday (11), Russian GDP will contract by 3.4% this year, far from the apocalyptic international forecasts made in March, shortly after the start of the offensive in Ukraine.
By 2023, the multilateral institution expects the Russian economy to contract by 2.3%, less than the 3.5% forecast in July.
The IMF highlighted in a report “the resilience of crude oil exports and domestic demand, with greater support from fiscal and monetary policies, and with the restoration of confidence in the financial system”.
In September, President Vladimir Putin boasted of a “situation returning to normal”, as in his opinion “the peak” of difficulties had already passed.
According to him, this translates into a minimum unemployment rate of 3.8% and a “falling” inflation of 13.7% compared to the previous year, after having set records in the spring in the heat of the first sanctions. international.
“We can estimate that the impact of the first sanctions has already passed, in particular the effects on the financial sector,” Elina Ribakova, deputy chief economist at the association of major global banks and financial institutions (IIF) told AFP.
According to her, “Russia managed to prepare and adapt to the sanctions”.
The diplomatic and economic fracture with the West has accelerated Russia’s rapprochement with China, its great neighbor with which it shares more than 4,000 km of border.
Faced with an almost inaccessible European market, “companies were forced to find other markets, especially in Asia and Turkey,” Natalia Zubarevich, an economist at Moscow University, told AFP.
Russia and China have already announced that their gas delivery contracts will be paid in rubles and yuan, a victory for Moscow, which wants to de-dollarize its economy.
Likewise, the crude oil production cut announced last week by OPEC+, much to Washington’s chagrin, is good news for Moscow, which will benefit from the subsequent rise in oil prices.
And the difficulties of the Europeans and the G7 to put a ceiling on the price of Russian oil – neither China nor India seem to want to join – has dissipated some clouds that hung over the Russian economy.
Structurally, the Russian economy will become even more dependent on the energy sector, while in high value-added sectors the gap will widen.
The isolation of international markets threatens to seriously harm the sectors most dependent on foreign technology. And is that the Russian promises to support an alternative production are nothing more than theoretical, in a country that does not have giants like Adobe, Microsoft or Apple.
Another example is how the lack of assembly parts sank car production in Russia. In mid-September, Japanese manufacturer Toyota closed its plant in St. Petersburg for lack of electronic components.
“About half of the companies affected by the sanctions still have difficulty finding alternative suppliers”, estimates Elina Ribakova.
In response, Russia decided to relax safety and environmental standards for vehicles made in the country, a major setback.
In a working document of the Ministry of Industry and Commerce, leaked to the Russian press, officials are alarmed by a delay “of 10 to 15 years” in the Russian technology industry, as well as a “dependence” on foreign production and a shortage. of manpower.
Another source of concern is seeing the impact of the European embargo on Russian oil, set from December 5, to which the embargo on refined products in February 2023 will be added.
Between January and August 2022, more than 40% of federal revenue came from the sale of oil and gas, according to the Russian Ministry of Finance.